Production Possibilities

Question 1

What does ‘scarcity exists’ tell you?

Answer 1

You can’t make enough resources for everybody at once

Question 2

What does ‘ceteris paribus’ mean?

Answer 2

“All other things unchanged”

An economic term that is always in effect

Question 3

Expand on what ceteris paribus means

Answer 3

All other things unchanged

Only consider what’s in the problem, nothing else matters

Question 4

What does production possibilities help show us?

Answer 4

Production possibilities helps show us the alternative combinations of goods/services that governments/firms can produce

Helps us determine the opportunity costs of production